RURAL AFFAIRS AND ENVIRONMENT COMMITTEE AGENDA. 10th Meeting, 2009 (Session 3) Wednesday 1 April 2009

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1 RAE/S3/09/10/A RURAL AFFAIRS AND ENVIRONMENT COMMITTEE AGENDA 10th Meeting, 2009 (Session 3) Wednesday 1 April 2009 The Committee will meet at am in Committee Room Decision on taking business in private: The Committee will decide whether to take items 4 and 5 in private. 2. Subordinate legislation: The Committee will consider the following negative instruments the Financial Assistance for Environmental Purposes (Scotland) Order 2009 (SSI 2009/75); and the Aquatic Animal Health (Scotland) Regulations 2009 (SSI 2009/85). 3. Pig industry: The Committee will take evidence from Philip Sleigh, Chair, Pigs Working Group, National Farmers' Union Scotland; Gordon McKen, Managing Director, Scottish Pig Producers Ltd; Brian McMonagle, Managing Director, Vion Halls; and then from Professor Christopher Wathes, Chairman, Farm Animal Welfare Council; Stuart Ashworth, Head of Economic Services, Quality Meat Scotland; Gavin Dick, Rural Business Consultant, Scottish Agricultural College. 4. Pig industry: The Committee will review the evidence heard earlier in the meeting.

2 5. Work programme: The Committee will consider its work programme. RAE/S3/09/10/A 6. Rural housing inquiry (in private): The Committee will consider a draft report. Peter McGrath Clerk to the Rural Affairs and Environment Committee Room T1.01 The Scottish Parliament Edinburgh Tel: peter.mcgrath@scottish.parliament.uk

3 RAE/S3/09/10/A The papers for this meeting are as follows Agenda Item 2 The Financial Assistance for Environmental Purposes (Scotland) Order 2009 (SSI 2009/75) The Aquatic Animal Health (Scotland) Regulations 2009 (SSI 2009/85) Extract from Subordinate Legislation Committee report RAE/S3/09/10/1 RAE/S3/09/10/2 RAE/S3/09/10/3 Paper from the Clerk SPICe paper (private) RAE/S3/09/10/4 RAE/S3/09/10/5 Agenda Item 5 Paper from the Clerk (private) RAE/S3/09/10/6 Agenda Item 6 Draft Report (private) RAE/S3/09/10/7 For Information Recent Developments RAE/S3/09/10/8

4 RURAL AFFAIRS AND ENVIRONMENT COMMITTEE RAE/S3/09/10/3 Agenda Item 2 EXTRACT FROM SUBORDINATE LEGISLATION COMMITTEE S 19TH AND 20TH REPORTS Extract from Subordinate Legislation Committee s 19th Report: INSTRUMENTS SUBJECT TO ANNULMENT The Financial Assistance for Environmental Purposes (Scotland) Order 2009 (SSI 2009/75) (Rural Affairs and Environment Committee) 2. This instrument adds a new grant programme, the Community and Renewable Energy Scheme ( CARES ), to those bodies listed at section 153(1) of the Environmental Protection Act 1990, to which the Scottish Ministers can give financial assistance for environmental purposes. 3. The Committee notes that, as the subject matter is devolved in relation to Scotland, section 153 has been amended separately for Scotland and for England and Wales. Legal advisers considered it appropriate to seek clarification of the drafting approach which did not maintain a distinct numbering of the list for Scotland in relation to this amendment. It was noted that a slightly different approach was adopted in relation to earlier amendments which were made simultaneously in both jurisdictions. 4. The most recent entry in relation to Scotland is listed (uu), this having been inserted by SSI 2005/324. For England and Wales the most recent entry is listed (yy). Legal advisers therefore queried whether the insertion to the list made by this instrument should not be shown as entry (vv), to follow after entry (uu) in relation to Scotland. 5. In acknowledging that section 153(1)(yy) does not apply to Scotland the response in Appendix 2 notes that it still forms part of section 153 of the 1990 Act, and that it requires to be taken account of in the naming of the new subparagraph. The reply also states that the drafting follows the practice used in primary legislation and that this is intended to avoid the confusion that could arise from having two sub-paragraphs (vv). 6. The Committee considers the Scottish Government s response to be satisfactory and reports this instrument to the lead Committee and the Parliament accordingly. APPENDIX 2 The Financial Assistance for Environmental Purposes (Scotland) Order 2009 (SSI2009/75) The Scottish Government is asked:

5 RAE/S3/09/10/3 Agenda Item 2 1. To clarify whether, in relation to the amendment which article 2 makes to section 153(1) of the Environmental Protection Act 1990(in the application of that section to Scotland), the inserted provision is not intended to follow after paragraph '(uu)' of section 153(1), rather than after paragraph '(yy)', as indicated (i.e. given that section 153(1) as it relates to Scotland currently ends in paragraph '(uu)', as inserted by SSI 2005/324) and if so whether in consequence the inserted paragraph should not be referred to as '(v v)', rather than '(zz)', as indicated. 2. If the Scottish Government agrees with the foregoing assessment, to explain how it is intended to address this matter, including any consequential adjustment which may be required in respect of footnote (c ) to article 2. The Scottish Government responds as follows: The Scottish Government consider that the new paragraph (zz) is correctly inserted after paragraph (yy) of section 153(1) of the Environmental Protection Act 1990 and is correctly referred to as paragraph (zz). While section 153(1)(yy) does not apply to Scotland it still forms part of section 153 of that Act and requires to be taken account of in the naming of the new subparagraph. The drafting follows the practice used in primary legislation which is intended to avoid the confusion that could arise from having two subparagraphs (vv). The Scottish Government does not therefore consider that any adjustment is needed in respect of the Order or footnote (c). Extract from Subordinate Legislation Committee s 20th Report: INSTRUMENTS SUBJECT TO ANNULMENT The Aquatic Animal Health (Scotland) Regulations 2009 (SSI 2009/85) (Rural Affairs and Environment Committee) 1. This instrument implements Council Directive 2006/88/EC on animal health requirements for aquaculture animals and products and on the prevention and control of certain diseases in aquatic animals. 2. Correspondence between legal advisers and the Scottish Government is reproduced at Appendix 1. Question 1 3. The Scottish Government acknowledge that an error has been made in respect that the references to non-commercial undertaking in regulations 12(1) and (7) should be to non-commercial installation. The Committee agrees with the Scottish Government s conclusion that this error will not have any effect on the meaning or interpretation of the instrument The Committee also notes that the Scottish Government will amend the instrument at the first convenient opportunity.

6 RAE/S3/09/10/3 Agenda Item 2 Question 2 4. The Committee considers that the definition of "processing establishment" in regulation 3 is unclear.in order to understand what is covered by it, readers of the instrument must be able to identify those establishments which process aquaculture animals under Part 4 of the Regulations or under any other similar legislation in the rest of the UK. The Scottish Government s response confirms that Part 4 does not identify those establishments specifically. The definition is intended to cover any processor which is served with a notice requiring slaughter of animals in the event of a disease outbreak. The identification of these processors will therefore depend on the circumstances of each outbreak, which is a future event. In the Committee s view is not possible at this point to identify who these processors are or will be, unless what is intended is that the definition captures any processor which could possibly fall into that category. That is not what the definition appears to contemplate. 5. The definition is important since it is the trigger for the requirement for authorisation of processing establishments under regulation 5. It is also a requirement of Article 4.2 of the Directive that each processing establishment slaughtering aquaculture animals for disease control purposes is authorised by the competent authority. Clearly, it is important that this requirement has been fulfilled. The Committee considers it is difficult to evaluate whether that has been done since the authorisation requirement appears to require knowledge of who will be subject to slaughter requirements in the event of a future outbreak 6. The Committee therefore concludes that the definition of processing establishments could be more clearly expressed so as to identify precisely which establishments require to be authorised. Question 3 7. The question of authorisation of establishments has been considered under question 2. The Committee also requested confirmation from the Scottish Government as to how the requirements under article 33 of the Directive for harvesting and further processing of aquaculture animals from infected areas would be implemented The Scottish Government s response explains that harvesting by authorised establishments will be regulated by notice under regulation 30. Leaving aside the question of identification and authorisation of establishments discussed under question 2 the Committee considered the response satisfactory. Question 4 8. The Committee requested an explanation from the Scottish Government as to why specialist transporters were subject only to registration and not authorisation. The Scottish Government response states that transport businesses are not covered by Article 4 of the Directive, which applies only to aquaculture production businesses. These are defined in Article 3 as any undertaking carrying out any of the activities related to the rearing, keeping or cultivation of aquaculture animals. The Committee recognises that it could be argued that transportation is an integral part of cultivation of aquaculture

7 RAE/S3/09/10/3 Agenda Item 2 animals intended to be marketed but the Directive is not entirely clear on the matter. 9. Article 8.3 requires transporters to keep certain records for the purposes of traceability. Article 13(1) requires disease prevention measures to be implemented in relation to transport. The Committee agrees with the Scottish Government s view that in order to maintain traceability effectively and to implement disease prevention measures with respect to transport it is necessary to identify transporters. 10. The Scottish Government consider that to ensure that the requirements of these articles are met, it is by implication necessary to bring in a system of registration of specialist transport businesses. However, the Scottish Government consider that the lesser requirement of registration is sufficient and that no requirement for authorisation under Article 4 arises. The Scottish Government view Article 8.3 and Article 13(1) as stand alone requirements for transporters. 11. While the Committee considers that there are competing arguments as to whether or not transporters should be considered within the definition of aquaculture production businesses it accepts the arguments put forward in support of the approach taken by the Scottish Government. Question The Committee sought an explanation from the Scottish Government as to the exemption from certain requirements of the Directive for transport of small containers. The Committee notes that the Scottish Government considers that regulation 21 does not represent a failure to comply with Articles 8(3) and 13(1) of the Directive, but a different method of meeting those requirements. The Committee is satisfied with this response. Question Regulation 25(4) provides that it is an offence not to comply with any requirement imposed by an initial designation under regulation 25(2). Regulation 29(4) provides that it is an offence not to comply with any requirement imposed by a confirmed designation under regulation 29(2). The regulations do not provide a defence of not having been served with a copy of the designation as provided by regulations 25(3) and 29(3). The Scottish Government decides on whom a copy of an initial designation is to be served (regulation 25(3)). But if a person is not served and thereby notified, that person may fail to comply with a requirement of the initial designation and be in contravention of regulation 25(4). As this relates to the policy of imposition of criminal sanctions and the available defences the Committee noted that this was not a matter that falls within its remit, but draws it to the attention of the lead Committee for its interests in these matters. 14. The Committee draws this instrument to the attention of the lead Committee and to Parliament on the ground that there is an error which does not appear to affect the operation of the instrument in respect that the references to non-commercial undertaking in regulations 12(1) and (7) of the instrument should be to non-commercial installation. The

8 RAE/S3/09/10/3 Agenda Item 2 Committee welcomes the Scottish Government s commitment to correct the error at the first convenient opportunity. 15. The Committee reports this instrument on the ground that the definition of processing establishment in regulation 3(1) could be more clearly expressed, given that the definition appears to require identification of those establishments which will be subject to future requirements under Part 4 of the instrument in relation only to slaughter of aquaculture animals in the event of an outbreak, and it is not clear whether these establishments can be identified and therefore authorised in advance. 16. The Committee considers that the response received from the Government in regard to the explanation of how Article 33 of Directive 2006/88/EC has been implemented in the regulations is satisfactory and reports accordingly. 17. The Committee considers that the Scottish Government's interpretation of the exclusion of the authorisation requirements under the Directive in relation to specialist transporters is satisfactory and reports accordingly. 18. The Committee considers that regulation 21 does not represent a failure to comply with the requirements of Articles 8(3) and 13(1) of Directive 2006/88/EC, but a different method of meeting those requirements; and is accordingly satisfied with the Scottish Government s response and reports accordingly. 19. The Committee draws to the attention of the lead committee for its interests that there is no requirement for general publication of an initial designation under Part 4 and that there is no defence to a charge of contravention of offences of non-compliance with prohibitions imposed following designation that the person charged was not notified of the designation by the Scottish Government. APPENDIX 1 The Aquatic Animal Health (Scotland) Regulations 2009 (SSI 2009/85) The Scottish Government is asked: 1. 'Non-commercial installation' is defined in article 3(1). Article 5(4) refers to the authorisation of a 'non-commercial installation' but article 12(1) and 12(7) refers to a 'non-commercial undertaking'. Is it intended that the references in article 12 should be to a 'non-commercial installation' and, if so, what does the Scottish Government consider the effect of the error to be? 2. With reference to the definition of processing establishment in regulation 3(1):

9 RAE/S3/09/10/3 Agenda Item 2 (a) what is meant by which processes aquaculture animals under Part 4 of these Regulations since Part 4 relates to the procedures for notification and control of disease outbreaks and does not appear to regulate processing of aquatic animals? (b) to explain how the Government considers this clearly imposes a requirement for authorisation on processing establishments slaughtering aquaculture animals for disease control purposes in accordance with article 33 of Directive 2006/88/EC as required by article 4 of that Directive? 3. To explain how the requirements in article 33 of the Directive for harvesting and further processing in relation to aquaculture animals from an infected area are implemented in these Regulations or otherwise. 4. With reference to regulation 12 to explain why specialist transport businesses may be subject to the restricted requirement for registration in accordance with article 4 of the Directive, when the derogation available appears to apply to businesses which keep aquatic animals which are not intended to be placed on the market? 5. To explain the basis within the Directive for the exemption for transport in small containers provided for in regulation In relation to the offences of non-compliance with the requirements imposed under regulation 25(2) and 29(2): (a) to explain the measures which the Government will take to ensure that these requirements will be made sufficiently clear to all persons who are required to comply (and so risk criminal prosecution for a failure to do so) given that it is not a defence to such an offence that the person was not notified of the requirement; (b) what measures the Government will take to publish withdrawal of those requirements under regulations 27 or 31? The Scottish Government responds as follows: 1. As the Committee notes, the term 'non-commercial installation' is defined in article 3(1) of the Regulations. Whilst regulation 5(4) refers to the authorisation of a 'non-commercial installation', regulations 12(1) and 12(7) refer to a 'non-commercial undertaking'. The Scottish Government is grateful to the Committee for drawing this error to its attention regulations 12(1) and (7) should in fact refer to a noncommercial installation. The Scottish Government considers that whilst the error is unfortunate, it is unlikely to give rise to difficulty in practice. A court would be likely to discern that a drafting error had occurred and would interpret the term consistently with the defined term non commercial installation. The Government will use the first convenient opportunity to amend the instrument to remove this error.

10 RAE/S3/09/10/3 Agenda Item 2 2. With reference to the definition of processing establishment in regulation 3(1): (a) Part 4 makes provision as to the steps to be taken in the event of a disease outbreak. These steps include the issue of a notice directing a person to take steps to secure the slaughter of any aquatic animal in the confirmed designation area in ways that are designed to control the disease (regulation 30(3)). A processing establishment as defined is a food business which processes aquaculture animals for food purposes, and which also has to comply with any notice issued under Part 4 of these Regulations directing the business to take steps to control the disease. (b) There is a clear requirement for authorisation of processing establishments slaughtering aquaculture animals for disease control purposes in accordance with Article 33 of Directive 2006/88/EC as read with Article 4 by virtue of regulations 5(1) and 7. Regulation 5(1) makes it an offence to operate a processing establishment unless authorised to do so by the competent authority. Regulation 7 makes provision for the authorisation of processing establishments. 3. The requirements in article 33 of the Directive for harvesting and further processing in relation to aquaculture animals from an infected area are implemented by the authorisation of processing establishments under regulation 5, and by regulation 30(3)(a) which provides for notice to be given as to steps which must be taken for the slaughter and disposal of aquaculture animals. 4. Article 4 of the Directive requires the authorisation of aquaculture production businesses and processing establishments, subject to the derogation in Article 4(4). Article 4 does not apply to transporters. The requirement for registration of a specialist transport business is based on the requirements of Articles 8(3) and 13(1) of the Directive. Whilst those provisions do not specify registration as a requirement, it is considered that in order to ensure that the requirements of those Articles are met, it is necessary to bring in a system of registration of specialist transport businesses. Regulation 12 therefore imposes such a requirement. 5. Article 13(1) requires Member States to ensure that necessary disease prevention measures are applied during transport and that aquaculture animals are transported under conditions which neither jeopardise the health status of the place of destination or of places of transit. It is considered that where aquaculture animals are transported in relatively small sealed containers, a method which represents a low risk of spread of disease, then these conditions are met. In other words, regulation 21 does not represent a failure to comply with Articles 8(3) and 13(1), but a different method of meeting those requirements.

11 RAE/S3/09/10/3 Agenda Item 2 6. In relation to the offences of non-compliance with the requirements imposed under regulation 25(2) and 29(2): (a) the measures which the Government will take to ensure that these requirements will be made sufficiently clear to all persons who are required to comply (and so risk criminal prosecution for failure to do so) are to identify those persons likely to be affected by the making of the designation and serve a copy on those persons under regulation 25(3) or 29(3)(b) as the case may be. Those persons would include relevant transporters and processors. In the case of a confirmed designation, the confirmed designation will also be published under regulation 29(3)(a); (b) the measures the Government will take to publish withdrawal of those requirements under regulations 27 or 31 are (a) to write to those on whom a copy of the initial or confirmed designation has been served, and (b) in the case of a confirmed designation, to publish a revocation notice in the same manner as the confirmed designation was published.

12 PIG INDUSTRY PAPER FROM THE CLERK Background 1. On 16 April 2008 the Committee held a one-off evidence-taking session to investigate concerns about the state of the Scottish pig industry. The Committee took evidence from industry representatives and from the Cabinet Secretary for Rural Affairs and Environment. At the meeting, the Cabinet Secretary explained that he would establish a short-life group (the Pig Task Force) to examine proposals to support the sector. 2. The Pig Task Force reported on 18 June. The report identifies and costs six priority areas: a de minimis payment scheme for pig producers; compensation for losses incurred through the loss of the cull sow market during last year s FMD outbreak; vaccination for the PCV2 infection; measures to eradicate sarcoptic mange; development of an on-farm recording system; and research on improving pigmeat labelling to increase consumer confidence. 3. On 7 August, the Cabinet Secretary announced his response to the report and on 15 August he wrote to the Convener, detailing this response (Annexe B). 4. The Committee discussed the Cabinet Secretary s response on 1 October and agreed to write to him expressing concern that he had not implemented in full the task force s recommendations and inviting him to explain his reasons. The Cabinet Secretary replied on 13 November (Annexe C). 5. On 26 November the Committee considered the Cabinet Secretary s response and agreed to write to industry representatives requesting views on this correspondence and inviting them to provide an update on the issues that remain of concern within the industry. Responses were received from (Annexe D): Scottish Pig Producers Ltd Quality Meat Scotland National Farmers Union Scotland Pigs Committee Grampian Country Foods (by then taken over by Vion Hall s) 6. On 4 February the Committee reviewed the evidence received and agreed to take evidence on the concerns for the future of the industry at a later meeting. At its meeting on 25 February the Committee agreed to hear evidence from pig industry stakeholders, including a representative of an organisation with a predominantly marketing interest, and a representative of 1

13 an animal welfare organisation on 1 April, and then to hear from the Cabinet Secretary on 22 April. 7. At its meeting on 1 April the Committee will take evidence from two panels comprising of representatives from: Panel 1 National Farmers Union Scotland Pigs Committee Scottish Pig Producers Ltd Vion Hall s Panel 2 Farm Animal Welfare Council Quality Meat Scotland Scottish Agricultural College 8. The Committee has received a joint evidence submission from National Farmers Union Scotland Pigs Committee and Scottish Pig Producers Ltd and a submission from the Farm Animal Welfare Council in advance of the meeting on 1 April. The submissions are attached at Annexe A. 9. Vion Hall s, Quality Meat Scotland and the Scottish Agricultural College have not submitted evidence specifically for the meeting on 1 April but both Vion Hall s and Quality Meat Scotland provided responses to the Committee s targeted call for evidence in January 2009 (see Annexe D). 10. A copy of SPICe paper 08/06 on pigs, published in January 2008, is attached for information at Annexe E. 2

14 ANNEXE A SUBMISSION ON BEHALF OF NFU SCOTLAND AND SCOTTISH PIGS PRODUCERS LTD. 1. NFU Scotland and Scottish Pigs Producers welcome the Scottish Parliament s Rural Affairs and the Environment Committee s invitation to give evidence on the state of the Scottish pigs industry on Wednesday 1 st April Introduction 2. Scottish pig producers are concerned that the recommendations of the Scottish Pig Sector Taskforce were not implemented in full, and particularly that no direct financial assistance was given to producers to compensate for losses resulting from the 2007 Foot and Mouth Disease outbreak, which was exacerbated by the exceptional market situation at the time. 3. Furthermore, a de minimis payment, which the industry believes would have been a significant difference, while compatible with EU state aid rules was not made either. 4. The Scottish Breeding Herd has declined to around 35,000 sows; this figure is 10,000 sows below the minimum requirement for a viable industry, as highlighted by the Strategic Review. 5. It is clear that the industry greatly needs to invest in order to maintain efficiency and in order to compete in the world market. However, this investment will not happen while producer confidence is low and retailers fail to broker a sustainable pricing policy. Low confidence has been compounded by the closure of the Buckie abattoir and continued speculation over the future of Vion. Impact of Regulation 6. The fact that UK pig producers are required to meet higher welfare standards than their European counterparts, who nonetheless have access to UK markets, thereby undermining the profitability of UK producers, is critical. This disadvantage will continue even when the EU stalls ban is introduced across other EU Member States. 7. Environmental legislation, in particular, could lead to further significant reductions in the breeding herd: 26-week slurry storage, required under the NVZ regulations will necessitate investment of between 5 and 7 million. 8. Proposed European legislation on Integrated Pollution Prevention and Control (IPPC) could encompass more Scottish pig producers if it lowers the current thresholds for inclusion (based on numbers of pigs per unit). 3

15 9. More funding is necessary to help producers pay for alterations to allow them to meet the legislative requirements. Funding for slurry storage is inadequate under the Scotland Rural Development Programme (SRDP) In the absence of financial support, many producers are currently not investing in their business, but taking advantage of the three-year window to comply with slurry storage, with the intention to run down units and stop production altogether in March

16 SUBMISSION FROM FARM ANIMAL WELFARE COUNCIL RAE/S3/09/10/4 [Note from the Clerk: this submission is a copy of a letter sent to the Cabinet Secretary for Rural Affairs and Environment in July 2008] Welfare of pigs in Scotland Following our meeting on 15 th April 2008, FAWC has now considered the questions you raised in relation to the welfare of Scottish pigs and of pigs reared abroad that produce pig meat, e.g. pork, sausage and ham, for sale in Scotland and the other home countries. It has proved difficult to distinguish between Scottish pigs and those produced elsewhere in the U.K., since there is considerable movement of both live animals and products between the home countries. In general, we have therefore answered your questions for the U.K. or Great Britain, but have commented on the Scottish situation where such information is available. The U.K. pig industry and imported pig meat The most recent data on number of breeding pigs for 2007 are 379,000 in England and Wales, 37,000 in Northern Ireland and 40,000 in Scotland. The U.K. as a whole showed a 2.7% reduction in the number of breeding animals from 2006, whilst Scotland showed a 4.8% reduction. This continues a long term trend which has seen the U.K. herd fall substantially by 52% since U.K. self-sufficiency in pig meat has fallen from 84% in 1998, to an all time low of 50% in The total volume of pig meat imports in 2006 was 872,183 tonnes, an increase of 5.5% from the previous year and of 37% since Denmark, the Netherlands and Germany are the main suppliers to the U.K, but there are also imports from other European countries, e.g. France, Belgium, Ireland and Spain. Comparison of British welfare standards for pigs with those of other countries that export to the U.K. Legislation Within the EU there is a common baseline for pig welfare standards set by Council Directives 91/630/EEC and 2001/88/EC, and Commission Directive 2001/93/EC. All countries outside the EU that export to the U.K., such as the United States, currently have no legislation that is specific for pigs. Within the EU, some countries have implemented legislation in addition to the EU baseline, and this has been the case for the U.K. The specific points of difference between the U.K. and the EU baseline are as follows: 1. The U.K. has had a complete ban on close confinement in individual stalls for non-lactating sows since 1 st Jan Most other countries continue to use stalls, and can do so until 2013 by which time they must have been phased out in the EU. An exception to this is Sweden, where stalls are also 5

17 no longer permitted, but imports to the U.K. from Sweden are small (<1%). The Netherlands adopted an intermediate date of 2008 to end the use of stall systems throughout pregnancy. 2. The U.K. does not allow stalls at any stage for non-lactating sows, whereas most other countries will continue to allow stalls for a period of 4 weeks after weaning beyond 2013, as permitted under current Directives. Voluntary measures More than 90% of U.K. pig meat is produced under the auspices of farm assurance schemes, e.g. the Quality Meat Scotland scheme, and its English equivalents run by Assured British Pigs and Genesis Quality Assurance. These schemes have defined written welfare standards which are audited by independent annual inspection and quarterly visits from a veterinary surgeon. Relevant points are: 1. No large-scale farm assurance schemes of this nature exist in other countries, although there is a range of small niche schemes in the U.K. and elsewhere. Whilst large scale industry schemes do operate in other European countries, for example the QSG scheme in Denmark, IKB scheme in the Netherlands and QS scheme in Germany, these focus predominantly on food safety rather than animal welfare issues and in some cases have a lower frequency of audit. The U.K. pig industry therefore has more rigorous inspection of compliance with animal welfare legislation and good practice than any other country. 2. The requirement for quarterly veterinary visits at which welfare is inspected is unique to the U.K. Whilst Denmark requires monthly veterinary visits, these are to assess compliance with the regulations governing the prescription of medicines, and do not involve an assessment of welfare. 3. Male piglets are not allowed to be castrated in a farm-assured herd in the U.K. Castration without anaesthesia is currently the norm in all other EU countries (and major pig producing countries outside the EU). A recent EU survey (2007) carried out as part of the Framework VI PIGCAS project confirmed that castration in these countries is done without anaesthesia and often with tearing of tissues in contravention of current Directives. 4. A high proportion of U.K. herds also require regular health monitoring through abattoir inspection schemes run by Wholesome Pigs Scotland and the British Pig Health Scheme. Few other countries operate such detailed inspection and feedback procedures, although Sweden is again an exception. A number of European countries have developed commercial contracts specifically to supply products for the U.K. market. Although these contracts specify production of pigs to U.K. minimum legal standards, they still permit castration. Using the number of such herds and the volume of imported product, BPEX (2006) suggest that the great majority (70%) of pigs for export to the U.K. did not meet U.K. minimum legal standards. Production systems 6

18 The U.K. has a higher proportion of extensive production systems than found in other European and non-european countries. In the U.K., BPEX estimates that 40% of sows are managed in outdoor systems, and that the great majority of sows have access to straw bedding. It is also estimated that 65% of finishing pigs have some degree of straw bedding. It has not been possible to obtain comparable data for Scotland alone. A survey carried out in 1999 indicated that no other EU country had more than 10% of finishing pigs in systems with straw. The availability of straw, or other similar alternative, has been shown in many studies to be important for appropriate expression of exploratory and foraging motivation, which is of particular significance for the dry sow fed a regulated diet. Straw bedding may also reduce the prevalence of foot and leg ill health. Exporting countries (to the U.K.) keep the great majority of their pigs in un-bedded, slatted systems. Whilst the nature of the production system is of less importance than the quality of management and stockmanship in determining pig welfare, the more extensive systems used in the U.K. allow greater possibility for the satisfaction of behavioural needs. Outcome assessment of pig welfare Welfare should be assessed by a combination of resource inputs and welfare outcomes and British scientists and farmers are pioneering such schemes. Assessment of welfare outcomes is a recent development and there are not yet international surveys that would permit an objective comparison between countries. The only published data relate to mortality in herds which has been recorded in databases for national analysis. These herds may not be representative of average performance in many countries. Data published by the InterPIG group indicate a significantly higher sow mortality rate of 14% in Denmark, compared with other EU-recorded countries including Great Britain (6%). The replacement rate of breeding animals is also higher in Denmark (50.4% versus 43.8%), suggesting that this cannot be simply attributed to a difference in disposal strategies for cull animals. The mortality of suckling piglets and growing pigs does not currently differ markedly between the EU countries where such data are recorded. In the future, objective welfare outcome data may become available through a standardized assessment scheme currently under development in the Framework VI project Welfare Quality. This would provide a much sounder basis for an international comparison of welfare between countries. The cost of production in the U.K. and exporting countries The U.K. has a higher cost of production than most other countries within the EU. InterPIG standardised cost of production figures for 2006 showed the cost of production was 12% higher in Britain than the EU average, and more than 60% higher than in North and South American exporting countries. World Trade Organisation rules are generally interpreted as precluding any trade restrictions on the basis of animal welfare standards in the country of origin, placing the EU in general and Britain in particular at a significant competitive disadvantage. 7

19 It is difficult to ascribe increased cost of production to specific welfare measures within the U.K., since other costs such as feed, land and labour also differ considerably between countries. However, the requirement to phase out sow stalls in advance of the rest of Europe imposed a significant cost penalty on U.K. producers for premature rebuilding or refurbishment. This often involved a change from a slurry-based to a straw-based system, requiring new manure handling systems, manure stores, machinery and clear span buildings. The capital costs of the feeding systems and buildings alone were estimated at the time of transition to range from 400 to 700 per sow place, a substantial cost in terms of profitability. The ban on sow stalls and the use of straw have imposed significant additional costs on U.K. pig farmers, who have generally not been rewarded for their efforts in the market place. Conclusions The majority of pigs in the U.K., including those in Scotland, are kept to a higher welfare standard than elsewhere in the EU and other countries. The higher standard arises from differences in legislation and voluntary measures but both will have increased the costs of pig production in the U.K. relative to those in exporting countries. While it is true that importers of pig meat into the U.K. could demand in their purchasing specifications that suppliers meet U.K standards, this can only be voluntary and whether importers insist on such a requirement will be determined, in part, by market forces. Other members of the food chain, particularly retailers, can play a major role by offering products of different welfare standards and origin, thereby catering for consumer choice. However, if pig meat is not labelled according to its welfare provenance, then concerned consumers will not be able to exercise their choice and may, unwittingly, purchase products that do not meet their requirements. The arguments for welfare labelling of animal products were made in the FAWC report (June 2006) and the possible introduction of a European labelling scheme is under active consideration by the Commission at present. Professor C. M. Wathes Chairman 7 th July

20 ANNEXE B LETTER FROM CABINET SECRETARY FOR RURAL AFFAIRS AND THE ENVIRONMENT I am writing to you as a follow-up to previous correspondence regarding support for the pig sector and the work of the Pig Sector Task Force. The final report of the Task Force provided a good analysis of the current state of the pig sector and the problems that it has been facing. However, a major new development since the completion of the report was confirmation of the takeover by Vion of Grampian Country Foods and I felt it important to consider the implications of this before coming to decisions. You may be aware that on 7 August I announced 1 million to secure a sustainable long-term future for the Scottish pig industry. The package is the first of its kind in Scotland for the pig industry and builds on actions already taken for the benefit of the sector. The package involves: total funding of 1 million to support the pig sector; an immediate 200,000 to improve the marketing of pig meat products to consumers, to be drawn from resources already earmarked for the red meat sector following foot and mouth disease last year; in line with a number of the Pig Sector Task Force s recommendations, around 100,000 to begin research into labelling and work to improve animal health; and around 700,000 for future projects to be allocated in partnership with the industry, allowing the impact of new industry player Vion to be fully taken into account There is a limit to the resources that are available from the Scottish Government for investment in particular sectors. I wanted to ensure that the money we have available for the pig sector is used in ways that help to secure its long-term future and this is why I have focused on forward-looking measures. In addition to high priority work relating to recommendations on pigmeat labelling and contributing to research on post weaning multi-systemic syndrome (PWMS), there will also be an immediate effort to increase the marketing of pigmeat products to consumers. Before reaching my decisions on the way ahead, I had a very useful meeting with representatives of Vion. It is clear to me that they are determined to invest in the long-term future of the industry in Scotland. However, as Vion have only just completed their takeover of Grampian Country Foods, it will be some weeks before they are in a position to crystallise their future strategy. It is important that the Scottish Government should work in partnership with the industry to determine how best to spend the 700,000 that remains for future projects and it seems sensible that we should allow Vion the time they need to develop this strategy before making detailed commitments. I remain very grateful to the Task Force for their work. In taking forward our commitment to the pig sector, we want to continue to work in close partnership with the industry. Accordingly, we will be maintaining close 9

21 contact with QMS and NFU Scotland on this in order to secure a successful and sustainable future for the pig sector in Scotland. Richard Lochhead, MSP Cabinet Secretary for Rural Affairs and the Environment 15 August

22 ANNEXE C LETTER FROM CABINET SECRETARY FOR RURAL AFFAIRS AND THE ENVIRONMENT Thank you for your letter of 9 October 2008 concerning implementation of the recommendations of the Pig Task Force. I was very grateful to the members of the Task Force for the work they did in analysing the current state of the sector and proposing ways of assisting the industry. I do not underestimate the effort involved and the commitment of the industry representatives. In my letter to the Committee of 15 April, I set out in detail the many ways in which the Scottish Government has been working to assist the pig sector, for example taking up its case with the European Commission and the Department for the Environment, Food and Rural Affairs; including support for the pig sector in the 1m package for the red meat industry following foot and mouth disease; considering regulatory matters; and engaging with retailers on the sustainability of primary production. Since my letter, we have continued to work with the industry with a view to securing its future. With regard to the food chain, I brought the hospitality, retail and wholesale sectors together with Scotland s pig industry in May. This provided a valuable opportunity for the whole chain to address the issues crucial to the sustainability of the pig sector in Scotland. A number of action points were agreed and I have no doubt that mutual understanding of the issues facing the different parts of the chain will serve us all well for the future. We built on this meeting when the First Minister hosted a Supermarket Summit in September which brought together influential figures from across the food industry. The pig sector is a valuable part of our food industry and it will benefit from the joint working that the Scottish Government has been keen to encourage. You will be aware that in August, I announced a 1m package of aid for the Scottish pig sector. This is the highest ever investment in the sector by Scottish Ministers. This announcement followed a range of actions by the Scottish Government to support pig producers. In allocating the 1m funding, I wanted to ensure that it was used in ways that would help to secure the long term future of the sector in Scotland. The measures that were announced in August included research into pig meat labelling, the marketing of pork and negotiations by Government officials on involvement in research on postweaning multi-systemic syndrome. The research into pig meat labelling is underway and work is continuing on the other two projects. On 22 October, I announced four further projects to support the sector, funded from the remainder of the 1m. The projects include a pig business network to improve benchmarking, collaboration and efficiencies across the supply chain; the appointment of a Pig Veterinary Adviser to offer practical on-farm advice on disease control and elimination; new guidance and one-to-one advice on slurry and waste management; and research to develop a test for 11

23 mycotoxin zearalenone, a feed contaminant affecting breeding and growth rates, in pig tissues. These priorities for the sector were considered with the industry including some of those involved in the Task Force. I believe that these forward looking projects which we are aiming to get underway as soon as possible - will help to ensure the sustainability of the sector in the long term. This has been my purpose in offering support for the sector. With falling grain and fuel prices and with pig prices remaining strong, the future already looks more promising for the sector. You ask specifically for views on each Task Force recommendation and the extent to which they have been implemented. Government was able to accept, in full or in part, two out of the six recommendations. These were as follows: Development of an on-farm recording system costed at 90,000 by the Task Force, this work is now fully included in the Scottish Pig Business Network which I recently announced as one of the projects to be funded from the pig sector 1m. Research on improved pig meat labelling this research was announced in August and is now underway. Conclusions are expected by November Unfortunately we were unable to accept the remaining recommendations. With only a finite amount of public money available to support the sector, the Government considers it essential to use that money in ways to strengthen the sector for the long term. The recommendations in question were: De minimis scheme this proposed scheme was costed at 694,000. It was a headage based scheme designed to provide direct financial support to producers and a vote of confidence by the Scottish Government in the pig sector. Whilst Government appreciated the reasons for the request for support, particularly given the difficulties caused by high feed and fuel costs relative to the price of pig meat, it was not possible to justify such a scheme. Only about 117 businesses would have benefited and while the scheme might have provided short term relief to some pig producers, it did not address the fundamental causes of financial difficulty in the pig sector identified by the industry (high feed and fuel costs) and therefore would not have had any long term value for the sector as a whole. Compensation for loss of cow sow market this proposed headage scheme was costed at 538,300. Government understood the call for compensation given the earlier impact of foot and mouth disease on the cull sow market. Again, however, the scheme would have provided only short term support for the pig sector. It was backward looking with no long term benefits to be gained. Furthermore, State aid approval would have taken time with no guarantee of success. 12

24 PCV2 vaccination Government officials are in negotiation with the Royal Veterinary College on involvement in research into post-weaning multisystemic syndrome. If it goes ahead, the research will be funded from the 1m for the pig sector. The work would be the subject of a contract and therefore I cannot be specific about costs. With regard to the actual vaccination, Government took the view that it would set a dangerous precedent to provide vaccine for a non-notifiable disease. State aid approval would have been difficult to obtain and the project in any case would not be the best use of 570,000 for the longer term. Sarcoptic mange at a cost of 41,000, this project would have benefited the few producers who have not already dealt with the problem of mange within their herd. Again, it would have set a precedent for Government to supply a treatment for a non-notifiable disease and State aid approval would have been difficult to obtain. I believe that the decisions that have been taken in terms of support for the pig industry are correctly strategic in nature and aimed at the long term sustainability of the sector. I remain committed to the future of the Scottish pig industry. Richard Lochhead MSP Cabinet Secretary for Rural Affairs and the Environment 13 November

25 RESPONSE FROM NFU SCOTLAND PIGS COMMITTEE Update on Current State of Scottish Pig Industry RAE/S3/09/10/4 ANNEXE D Firstly, can I thank you for the opportunity to update the Rural Affairs and Environment Committee on the current state of the Scottish pig industry. Before looking at current conditions and prospects for Scottish pig producers, it is worthwhile considering the background to your request. The Scottish Pig Industry Taskforce was established by the Cabinet Secretary in April 2008 and charged with identifying actions that would reverse the significant downturn in the sector. The difficult conditions being experienced in 2007 were exacerbated by the FMD outbreak that year, and these continued into The taskforce identified that there was an immediate need for short-term measures to restore confidence to the sector and its recommendations to the Cabinet Secretary were focussed on actions that, in its view, would deliver on that basis. However, the Strategic Review report was commissioned in August 2008 with none of the Task Force recommendations supported. We appreciate that the Cabinet Secretary has chosen to support longer-term objectives, and there is some merit in the projects now being supported. Despite this, the feeling from grass roots pig producers is that more immediate, direct support for producers was justifiable and desperately needed. Without that immediate support, there has been further contraction in the Scottish pig herd to 38,000 breeding pigs. A recent report has suggested that the pig herd is now below the critical mass required for a sustainable Scottish pig sector. While NFU Scotland supports the stakeholder culture developed by the Scottish Government to help inform policymaking decisions, lessons from the pig task force must be taken on board if the process of consultation in this manner is to be improved. Current Industry Position Currently Scottish Pig Producers are awaiting a long expected price rise owing to decreased supply, yet steady demand. Pig producers bank accounts desperately need replenishment and at the same time, the infrastructure on farm requires immediate investment. Pig accommodation and handling facilities on many farms are coming to the end of their life span. With Nitrate Vulnerable Zones (NVZs) legislation now in place, many farms will also have to find additional money to invest in slurry storage. This is required to meet legislation but is likely to cost many tens of thousands of pounds. 14